Metropolitan Rail. Co. v. Fowler, App. the proper exercise of their powers entered upon, appropriated, and used the surface subsoil and under-surface of a public street, and, after removing the same, made their line below and across the street. The plaintiffs did not purchase, take, or use any portion of the street or highway. The railway was constructed by excavating the soil, and building an arch or tunnel in brickwork over the excavation to enclose the railway. The foundation of the tunnel was permanently built into the soil. The plaintiffs did not receive any tolls or yearly profits in respect of the tunnel, otherwise than by means of the fares paid to them for the carriage of passengers and goods. The plaintiffs having been assessed to the land tax in respect of the tunnel,-Held, that their interest in it was not a mere easement, but was a hereditament" within the meaning of section 4 of 38 Geo. 3. c. 5. Held further (LOPES, L.J., dissenting), that the plaintiffs were liable to be assessed to the land tax in respect of such interest.

Judgment of the Queen's Bench Division (60 Law J. Rep. Q.B. 518) affirmed.

Appeal from a decision of a Divisional Court (Cave, J., and Vaughan Williams, J.) directing that judgment should be entered for the defendants upon a Special Case (1).

For the purpose of the present report, the following is a sufficient statement of the facts:

By section 4 of 38 Geo. 3. c. 5 (referred to as the Land Tax Act) it was enacted that "all and every manors, messuages, lands, and tenements, and also all quarries, mines of coal, tin and lead, copper, mundic, iron, and other mines, iron mills, furnaces, and other iron works, salt springs and salt works, all alum mines and works, all parks, chaces, warrens, woods, underwoods, coppices, and all fishings, tithes, tolls, annuities, and all other yearly profits, and all hereditaments of what nature or kind soever they be

within that part of Great Britain called England, Wales, or Berwick, and all and every person and persons, bodies politic and corporate, having or holding any such manors, messuages,

(1) 60 Law J. Rep. Q.B. 518.

lands, tenements, or hereditaments, or other the premises in respect thereof, shall be charged, with as much equality and indifference as is possible, by a pound rate for or towards the several respective sums by this Act set or imposed."

By the Metropolitan and District Railways (City Lines and Extensions) Act, 1879 (42 & 43 Vict. c. 201), s. 5, the plaintiff company, in conjunction with the Metropolitan District Railway Company, were authorised to make and maintain certain railways, a new street, and other works in the Act described, with all proper stations, sidings, approaches, works, and conveniences connected therewith respectively, and to enter upon, take, and use such of the lands delineated upon the deposited plans as might be required for that purpose." Among the railways authorised by the Act was a line therein described as " Railway No. 1," effecting a junction between the lines of the Metropolitan District Railway Company at their Mansion House Station and the lines of the plaintiff company at their Aldgate Station.

By section 2, the Lands Clauses Consolidation Acts, 1845, 1860, and 1869, and the Railways Clauses Consolidation Act, 1845, were, except where expressly varied by the Act, incorporated with it and made applicable to each of the two companies. By section 16: " with respect to any lands which the two companies are by the provisions of this Act authorised to enter on, take, and use, and which are in or under the roadway or footway of any street, road, or highway, the two companies shall not be required wholly to take those lands or any part of the surface thereof, or any cellar, vault, or other construction therein or thereunder held or connected with any house in any such street, &c., but the two companies may appropriate and use the subsoil and undersurface of any such roadway or footway, and, if need be, they may purchase, take, and use, and the owners of

any such vault, cellar, or arches shall sell the same, for the purposes of the railways . . . . and works or any of them; and the purchase of any such cellar, vault, or construction shall not in any case be deemed the purchase of a part of

Metropolitan Rail. Co. v. Fowler, App.

a house or other building or manufactory within section 92 of the Lands Clauses Consolidation Act, 1845." By section 17: "nothing contained in the section of this Act with respect to underpinning houses near the railways, or in the section authorising the two companies to acquire easements only under roads, &c., and purchase cellars, &c., ... nor any dealing with the lands in pursuance of those sections or either of them, shall relieve the two companies from the liability to compensation under section 68 of the Lands Clauses Consolidation Act, 1845."

By the Metropolitan Railway Act, 1881 (44 Vict. c. 25), s. 5, the plaintiff company were authorised alone to make so much of the projected Railway No. 1 as lay between Trinity Square and High Street, Aldgate. This section of the railway passed under a public street or highway consisting both of footway and roadway, and known as the Crescent Minories. The plaintiffs proceeded to make the railway, and in the proper exercise of their powers, and during construction, disturbed the surface, and entered, appropriated, and used the surface subsoil and undersurface of so much of the said public street as was necessary for the construction of the railway, and, after removing the same, they made their line below and across the said street in the space thus created. They did not purchase nor, except for the purpose of and whilst making the arched tunnel, take or use any portion of the surface of the street. The portion of the railway passing under the street occupied solely the position of the subsoil removed for the purpose of its construction. railway was constructed through the land by entering into possession of the surface for the purposes of and during construction, and then by a system known as the "cut and cover system—namely, the cutting or excavating the soil, and by building an arch in brickwork of a thickness of four feet or five feet over the excavation to enclose the railway. The arch was then covered with soil. The foundation of the arch was permanently built in the soil.

The

The plaintiffs entered into a contract for letting the use of the side-walls of the railway to a firm of advertisement con

The

tractors, without excepting parts of the railway which lay under streets. plaintiffs had never paid any rent or other sum of money in respect of their entry upon, appropriation, use, and removal of the subsoil, or in respect of the occupation by their line of the space thus created.

The plaintiffs were until the Metropolitan District Railway Company, after the issue of the writ in this action, exercised their powers under 47 & 48 Vict. c. ccxxix. s. 20-the sole owners of the railway, and kept it in repair, and had the sole use and occupation thereof. The plaintiffs do not receive any tolls or yearly profits in respect of the portion of their railway under the said street, otherwise than by means of the fares paid to them for the carriage of passengers and goods in the trains of the company passing over the same.

The plaintiffs were assessed by the defendants to the land tax for the year ending the 24th of March, 1883, in respect of the tunnel. The plaintiffs having refused to pay, the defendants distrained on the plaintiffs' goods.

The question for the opinion of the Court was, whether the plaintiff's were liable to be assessed towards the payment of land tax in respect of the tunnel.

In the Divisional Court, Cave, J., held that they were liable to be assessed; but Vaughan Williams, J., held that they were not. The latter Judge, however, withdrew his judgment.

The plaintiffs appealed.

Balfour Browne, Q.C., and Lawson Walton, Q.C., for the appellants.-The company are not liable to be assessed to the land tax in respect of the tunnel. The surface of the land is vested in the road authority. The subsoil and the surface are not vested in the same owners. If the railway company had purchased private property under which the tunnel passed, they would, no doubt, be liable to pay the land tax. The company are not the owners of the space under the surface in which the tunnel is built. The tunnel is merely used for the conveyance of passengers. The company have an easement and nothing more; and whatever their interest may be, it certainly is not a

Metropolitan Rail. Co. v. Fowler, App. hereditament within the meaning of section 4 of 38 Geo. 3. c. 5. The tunnel is used by the company in the same way as water-pipes laid in the streets are used for the conveyance of water. A waterworks company has been held not to be liable to be assessed to the land tax-The Chelsea Waterworks Company v. Bowley (2). If the decision of the Court below is right, then the land tax, in a case where it has been redeemed, would become resuscitated if a tunnel were subsequently made. It never was intended that the land tax should be payable twice over. The owner

of the surface was to be taxed in respect of all land; and but for the words relating to mines, &c., in section 4, payment of the land tax would free the land altogether. The words " and also," following the words "lands and tenements," must have some meaning given to them. The words "and also" were intended to cut down what had been mentioned before in the section. Section 16 of 42 & 43 Vict. c. cci. was so framed as to obviate the necessity for the railway company to purchase the land. Even if the railway company have acquired something more than an easement, yet, inasmuch as the tunnel is below the surface, they are under no liability in respect of land tax, which is assessable only in respect of surface land.

Scrutton and Hewitt, for the respondents. The Chelsea Waterworks Company v. Bowley (2) is really explained by Lord Campbell in The Queen v. The East London Waterworks Company (3). In the Chelsea Case (2) the water-pipes were considered as mere chattels which could be distrained; and the judgment of the Court is based on that view. In The Waterloo Bridge Company v. Cull (4) the land tax was redeemed, and then the bridge was built; but it was held that the bridge was assessable in respect of the tolls, on the ground that the tolls arose out of the use of the land. The tax is not confined to the surface of the land, and to hold that it is would be to read into the Act a provision which it

does not contain. The words used apply only to incorporeal hereditaments; and it is suggested that it was intended that all lands should be taxed.

[Upon the question whether the company had acquired an easement, the Court intimated its opinion that the company had acquired something more than an easement.]

The land tax is not chargeable by section 4 of 38 Geo. 3. c. 5 upon any person or upon any interest in land, but upon land which has an annual value. That is to be gathered from the latter part of the section, the object of which is to obtain an assessment upon property which has a value, whether that property is surface land or land below the surface. If the land, wherever it may be situated, is valuable, then it is assessable to the land tax. Balfour Browne, Q.C., replied.

Cur. adv. vult.

LORD ESHER, M.R. (on Dec. 18).—The question in this case is whether the Metropolitan Railway Company are liable to pay land tax in respect of a tunnel on their railway. Now the first point to consider is, what is the legal interest of the company in the tunnel, or in the ground it occupies? Is it a mere easement, or is it a "hereditament"? The distinction between the two has been well expressed by Lord Justice Lopes in Reilly v. Booth (5). If the interest which the owner has is an interest in land which is his own, that is a hereditament. An easement, however, is a right which a person has over land which is not his own. A man cannot have an easement over his own land. Can it then be said that this tunnel was a mere right of way? Clearly not, because it belongs to the company, and is made on land of which they are the owners. The company have an in

terest in the land and in the tunnel. It is not, therefore, an easement, but a hereditament in the ordinary legal sense of

the term.

Then we have to consider what it is in regard to the statute 38 Geo. 3. c. 5. s. 4. Now is this interest in land, which is a hereditament in the ordinary sense, a matter in respect of which the owners are

Metropolitan Rail. Co. v. Fowler, App. bound to pay land tax. It is obvious that with regard to such an interest as a tunnel one person may own the tunnel and another the surface of the land. It may well be that, as in the present case, a railway company may be entitled to a tunnel, but not to the surface. It is a statutory right. It has been argued that the company, if they had the surface, would be taxable in respect of it, and that they might, if they liked, have redeemed the land tax in respect of the surface, and that that would free the land from land tax to the centre of the earth, and that, therefore, the land in which the tunnel was made would have been redeemed. If that is so, it was said that the company would have paid land tax in respect of the land, and would, according to the respondent's contention, have to pay it again. That was no doubt a strong argument, but, in my opinion, the answer to it is this: if the land is in its ordinary normal condition, without any separate and distinct taxable interest below the surface, redemption of the surface redeems the subsoil; but if there is a separate and distinct interest in the subsoil, that interest is not, in my opinion, redeemed by the redemption of the surface. Suppose, for instance, there was a mine below the surface undiscovered at the time the surface-owner redeems, he would only redeem the land in its ordinary condition. It is not correct to say that he would thereby have redeemed the mine-a new and distinct interest-when discovered. However that may be, the Act is clear to shew that one person may be taxed for the surface, and another for a mine beneath it. Mines are clearly taxable by the express terms of the Act, whether the surface has been redeemed from land tax or not. But the section goes on to include as taxable "all hereditaments, of what nature or kind soever they be." Those words, according to the ordinary rule of construction, mean all hereditaments of the same kind and description as the things that precedenamely, things below the surface. The land is therefore to be taxed as if it were ordinary land; but, irrespective of that, any distinct interest which is below the surface is also to be taxed if it is an interest of the same kind as a mine. I think that

the tunnel in the present case was a hereditament, and that it comes therefore within the very words of the section, and that the company are liable to be taxed in respect of their interest in it, since it is a hereditament of the same kind as a mine. I put a case during the argument in which I should have no doubt that there would be a taxable interest below the surface.

If a person were to enter upon the face of a perpendicular cliff at the seaside and to excavate it, and to place there a valuable property, as, for instance, a casino, to which people might go for their amusement, that would create a valuable interest in the land below the surface which would be subject to land tax, although the same or another owner were taxable in respect of the top of the cliff, and in respect of the cliff itself, so far as there was no distinct interest in it. For these reasons I agree with Mr. Justice Cave that the company are taxable in respect of this tunnel.

LOPES, L.J., read the following judgment:- I agree with the rest of the Court that the defendants took more than an easement. They took the exclusive and unrestricted use of a piece of land. I adhere to what I said in Reilly v. Booth (5)" The exclusive or unrestricted use of a piece of land beyond all question passes the property or ownership in that land, and there is no easement known to the law which gives exclusive and unrestricted use of a piece of land. It is not an easement in such a case; it is property that passes."

But I do not agree with the other members of the Court that this tunnel is assessable to the land tax.

What is the assessable property? The following are declared liable to assessment by section 4 of 38 Geo. 3. c. 5: "All and every manors, messuages, lands, and tenements." These are very comprehensive words, and relate beyond doubt to the surface. Then follow the words: "And all quarries, mines of coal, tin and lead, copper, mundic, iron and other mines." I presume the idea was that where there were valuable underground properties in the shape of mines, they were not to escape

(5) Law Rep. 44 Ch. D. 12, at p. 26.

Metropolitan Rail. Co. v. Fowler, App. being charged because the surface was assessed, but were to be assessed to the land tax in addition, so that in such cases there would be a double tax, partly for the surface and partly for the mines underneath. Then follow the words: "salt springs and salt works, all alum mines and works," properties which might be either. underground or on the surface.

Then we

find: all parks, chaces, warrens, woods, underwoods, coppices." It is difficult to understand why these properties are specifically mentioned, because they would be covered by the description "lands and tenements" appearing earlier in the section. Perhaps they are introduced for caution, in order to shew that these kinds of properties are not to escape assessment. Then come the words "and all fishings, tithes, tolls, annuities, and all other yearly profits." These words introduce a new kind of property, property of an incorporeal nature, not previously dealt with. The section winds up with this sweeping clause "and all hereditaments, of what nature or kind soever they be, situate, lying and being, happening or arising within the places aforesaid."

It is sought to bring this tunnel within these last words. It is said it is a "hereditament." No doubt it is; but is it a taxable hereditament within the meaning of this section, having regard to the fact that the surface is already assessed to the land tax?

I think not. I agree with the view of Mr. Justice Vaughan Williams. As a hereditament it is already assessed as land

I presume, assessed as a hereditament to the centre of the earth. Unless it can be brought within one of the kinds of property specially mentioned in section 4, I do not see how it can be assessed again. If there was a mine under the surface of the land, there would be an assessment for the land and an assessment for the mine, because mines are specifically mentioned. So again, if there were under the surface any of the underground properties mentioned in the section. But there not being in this case any of the properties specifically mentioned under the surface, it appears to me the assessment is exhausted when the surface has been taxed.

Suppose the land tax on the land under which the tunnel is had been redeemed before the tunnel was constructed, that redemption would have extended to the centre of the earth, and would have exonerated that land from all liability to the land tax, unless the tunnel could be brought within any of the kinds of property specifically mentioned. It is a tunnel, and could not be brought within any of those descriptions. I cannot, therefore, think that it is assessable to the land tax. If it was, there would be imposed a double tax in a case not falling within any of the descriptions of property mentioned in the section in which a double tax is authorised. The other members of the Court, however, differ from me, and agree with the senior Judge in the Divisional Court. The appeal must, therefore, be dismissed with

costs.

KAY, L.J., read a judgment as follows: The statute 38 Geo. 3. c. 5, made the land tax perpetual. It fixed the amount to be paid by the various counties, cities, boroughs, towns, and places in England and Wales; and by section 4: " to the end the full and certain sum by this Act charged upon the several counties, cities, boroughs, towns, and places. . . as aforesaid may be fully and completely raised and paid," it was enacted that certain properties therein described "shall be charged with as much equality and indifference as is possible by a pound rate," to be paid by four quarterly payments. The machinery for making the assessments was, by sections 7 and 8, that certain commissioners, who were to meet as often as necessary, should arrange which of them should act in the several divisions or hundreds, and those appointed to act within each of such hundreds or other divisions were to cause the proportions charged upon such division to be equally assessed, and for that purpose to appoint assessors, who were with all care and diligence to assess the full sum upon the various properties. It is obvious from this brief sketch of the statute that the assessment upon each description of property charged must be made according to the value of such property, as nearly as it can be ascertained, by a "pound rate," which I understand to mean so much for